Launching my first product in the Atlassian Marketplace was the best decision I could make! Period. There's a high chance Jexo wouldn't exist today if we'd go and have a stand-alone project management platform.
You see, for digital product makers with limited resources like myself, succeeding requires navigating a risky and lonely digital realm, often without a compass. A digital marketplace is like a travel companion. It shows you pathways and gives you travel gear, making your journey towards success a lot more comfortable. For a small fee, of course 😌
There are strong reasons why you should consider launching your product in a digital marketplace like Atlassian's, and I'll mention them in this episode of The Startup Corner. But not everything is cotton candy, and there are ways you could crash and burn in this kind of ecosystem if you're not careful. Let's have a look what digital marketplace is and what to look out for so you avoid crippling your business and product right at the start.
Digital Marketplace vs. Standalone Platform
Consider the following scenario: You have an excellent idea of improving reporting in projects and want to transform it into a product. What are your options?
You could build a complete project management tool that incorporates reporting excellence, but what are your odds in joining the big guns in the Project Management arena. Well, without deep pockets and an impressive phonebook of decision-maker buddies, pretty slim. And even with all that, how many of your buddies can you really convince to drop the tools ingrained in their ways of working and replace them with yours?
Not to mention all the overhead with technology. What protocols do you use to make your product secure, how do you charge for it, and so on. And all of this needs to be dealt with before you make a dime, of course!
Another option is to build out just the reporting bit. You can make it integrate with popular project management tools and avoid building the other parts except reporting. That way, you focus on what you know best, and you also have higher chances to break through teams if the tool does one Project Management function well rather than trying to replace the entire toolset.
But you're still left with having to pour money in tech, sales, and dust off the trusty phonebook with well-positioned friends. If you have one, that is.
But if all that doesn't sound appetizing and makes you consider sticking with your day job, don't give up just yet because there might be an approach fit for you. How about going where your customer is? How about you build a reporting app or plugin for Jira or Monday, or Salesforce?
There are established project management tools that offer their customers the choice of extendability through a marketplace of apps. And I'm sure users of, say, Jira would love your reporting solution that seamlessly installs & integrates.
What is a Digital Marketplace
Here's a broad definition of what digital marketplace is:
A digital marketplace is a platform creating a venue for both buyers and sellers to transact over a product or a service. It matches potential buyers of a service or a product with providers of that service or product.
The digital marketplace acts as an intermediary between buyer and seller and deals with all the logistics around distribution, acquisition, or payment transactions, so you don't have to. It does this in exchange for a percentage fee out of each sale.
The digital marketplace industry has been booming in the last few years, and there is a variety of types out there to enable digital product makers to thrive.
But today, we're talking mainly about digital marketplaces developed by existing Software as Service businesses to promote the extendability of their products by allowing third-party startups like yourself to build apps or extensions. Basically, giving you the tools and platform to create additional functionality and getting you paid for it on a recurring basis.
Some quick examples of such SaaS digital marketplace platforms include Slack, Salesforce, and Atlassian. The latter being the digital marketplace our business is part of, and I will use it in examples.
But why consider digital marketplace, and how does it help you launch and grow your own SaaS product? Great question! I'm going to list out 8 of the most important benefits we took advantage of in our journey as vendors in the Atlassian Marketplace ecosystem. Hopefully, you can make your own conclusions.
1# Volume of visitors to the marketplace is high
A marketplace will have a high volume of traffic, and a percentage of that will be people looking for a solution like yours. So it makes perfect sense your product is listed here. The growth and the survival of the marketplace depend on the volume of acquisitions on the platform. Makes sense, right? So, a company like Atlassian will invest in driving constant traffic and optimizing the experience to maximize sales. And this is huge for a fresh startup with little capital like yourself. It means you don't have to spend money you don't have so that you drive leads to your product website or worry if your conversion pages are optimized enough.
2# Higher search placement is easier to get
Something that very few talk about and with good reason! It is much easier to rank your listing high on a platform like Atlassian Marketplace than Google search. Mainly because of 3 reasons:
- Space is not as overcrowded by million results making it nearly impossible to have exposure.
- The indexing engine is simplistic by comparison, which means you can tweak your listing to perfection and chase to satisfy the algorithm with effective results.
- There will still be popular, if not decent, search keywords that competitors have not capitalized on. All you need to do is identify your consumer's vocabulary, and there are several ways to do that.
Another massive benefit that some of the marketplaces have is instant indexing. Now, this will not be the case in every platform, but for Atlassian Marketplace, every change you make to your app listing has an immediate effect. And I'm not only referring to what visitors see when they land on your profile but also where you place on search results. And this means you're enabled to tweak and experiment with your listing data and see in real-time how it impacts your position for a specific keyword.
Honestly, this is brilliant, and I wish more platforms would ditch their nightly indexing habits and implement something real-time like Atlassian does.
3# Free promotion as a bonus!
Most of these marketplaces have several promotion campaigns to place products for consumers strategically. For example, Atlassian has a Staff Picked apps, a section for apps with solid security practices, and plenty of category-based featured pages. Due to the highlighting and stronger discovery through advertising, apps in these sections and pages usually get more traffic.
Atlassian has individual criteria to meet to qualify for each of the mentioned featured places. But they're not impossible to achieve, although some would argue that you need many installs and be ahead of your competition. It doesn't apply to "Staff Picked" category or trust signals and section, and being early in your journey, the extra installations of your apps make such a big difference.
4# Easy purchase experience brings more customers
This might not be the same with other platforms, but I'm sure there are others out there with the same experience. Atlassian offers a very seamless licensing experience for apps. For example, for their task management tool Jira, customers only need to click one button to install an app from the digital marketplace. This makes it easy to install and try apps and figure out which ones are suitable for your team. With each app installed, the customer gets 30 days for free with the app, and after that, to start paying for it, they need to do absolutely nothing!
Yes, you heard that right. The billing system used for apps is unified with paying for the main product. This means that if the customer has already set up a payment method for their recurring Jira subscription and they decide your app is valuable, they will pay automatically on the same invoice with their Jira. It makes for a shorter approval and acquisition process for your customers, and there are no switches to flip on your side. It is all seamless and less likely for the customer to fall through at the acquisition stage.
5# One customer invoice makes accounting simple
Contrary to what you might think, Jira users will not pay you directly for your app, but they pay Atlassian, which pays you. To get specific, Atlassian pays you once a month a lump sum for all of the licenses used by their customers, which makes them the reseller of your licenses. This means your accounting becomes more straightforward because you only need to issue one monthly invoice. And having Atlassian as your single paying customer means your monthly payments will usually be in full and in time. So no chasing after unreliable customers for payments and dealing with tens, hundreds, or even thousands of invoices.
6# Less technical overhead
I always say that building apps for Jira resemble building features in a product. Honestly, for me is excellent not caring much about how to authenticate and manage users or how to charge for the product. Dealing with payment gateways, user access management, various SSOs is still overhead. Yeah, sure, things have evolved and gotten easier lately with full frameworks and the likes of Stripe, but still, I'd rather my team and I focus on building cool features than implement and manage all those systems.
7# Developer tools
To take things further, not only do you have less tech overhead, but most of the marketplaces will have thorough developer documentation and tools to help you quickly get up and running with building your product. For example, Atlassian has a couple of app frameworks to build for Cloud, a front-end UI library, so your app looks and feels like an Atlassian product and extensive API documentation for most data available in Jira or Confluence.
8# You're not alone with the Ecosystem community
Where there's a marketplace, there are many others like yourself. Often the community behind a product can help make or break it. Luckily, the Atlassian Developer Community has many involved individuals eager to help and keep the marketplace makers in check when things are bumpy.
I find it refreshing to be part of an active community and know that many good people would come to my rescue if I get stuck with something. There are also many tools and resources created by the community that will save you a lot of time and headaches. For example, we published our open-source projects like an app boilerplate to help you start new apps quickly and maintain a coding style. We also published our script to pull marketplace license data and send it to reporting tools and a few UI components.
6 things to look out for when starting on digital marketplace
As mentioned at the start, yes, there are massive benefits to launch on digital marketplaces, but you can wind up calling it quits if not careful. Here are a few things to research and watch out for before entering the respective platform:
1. Flawed dev tools
If the developer tools and resources are massively incomplete or full of issues and challenges raised by the community, it means you'll waste time dealing with headaches and workarounds. You might also reach dead ends that will cause significant shifts in your plans.
2. Rate of change
If the marketplace ecosystem and platform are changing or evolving rapidly, you'll need to be aware of it and understand if you can keep up with all the changes imposed by the platform. As a newbie in the ecosystem, it can get overwhelming. So try not to only look at what the big peers feel about the ecosystem and make friends with others at the same end of the journey as you.
3. Platform fees
Some marketplaces charge significant fees; 30 to 50% is a big cut, even 20-25% is substantial, especially nowadays when platforms are racing each other in benefits to attract more developers. So you need to evaluate the benefits a specific marketplace will bring and if the fees they charge are justified.
4. Platform versatility
This is mainly regarding the licensing and pricing. Are you able to structure the pricing model the way you see fit, can you do freemium, and are there means for you to upsell or cross-sell to your users? If you're not well versed in the SaaS pricing strategies, do some research, then try and figure out what will work for your product. And if the marketplace is restrictive, will it make you rethink the pricing or the platform.
Basically, what are the rules and the big no-nos you need to comply with. For example, due to GDPR restrictions, Atlassian doesn't share user information with app vendors. This means all our onboarding, upskilling, and notifications need to be done strictly in the app or sent to a single tech contact email address. The restrictions a marketplace has can be the deciding factor to if you go marketplace app or stand-alone SaaS.
6. Startup friendly
Do figure out if the platform has incentives and programs to help new joiners grow in the space. Many just blatantly favor, promote and aid the big guys because they bring the big bucks. So then is there a point for you to try and join what seems like an elitist environment?
For example, Atlassian does have metal tiers with better benefits for the larger partners, but they also invest in educating and promoting new startups. They also have an investment program called Atlassian Ventures, where you can submit to get a loan note to help you build and evolve your product.
And that's about it! I gave you a bit of my cumulated knowledge and experience with marketplaces in the hopes that you can make the right decision for your business. Every marketplace will have challenges, but what's essential is appropriately evaluating the benefits and underlying issues before you dive in and adopt such an ecosystem as a core component of your business model.